Ministry seeks Cabinet approval for Power Grid stake sale

New Delhi: The Power Ministry has sought Cabinet approval for a plan to sell shares in state-run Power Grid Corp.

"Ministry of Power has sought the approval of Cabinet Committee on Economic Affairs (CCEA) for follow-on public offer of Power Grid," the company said in a BSE filing Friday.

The offer will consist of a fresh issue of 60.18 crore equity shares, equivalent to 13 percent of the company's paid up capital, and disinvestment of 18.51 crore shares, or a 4 percent stake, by the government, according to the statement.

Power Grid shares gained 0.91 percent to Rs 99.80 at the close on the BSE, giving the company a market capitalisation of Rs 46,204 crore. At the current price, a 13 percent stake is valued at about Rs 6,000 crore.

The stock had reached a 52-week high of Rs 123 on September 14, 2012.

The Ministry of Power also said that Power Grid may go ahead with the appointment of merchant bankers and other intermediaries for the issue.

The government holds a 69.42 percent stake in Power Grid, the country's largest electricity transmission utility.

This would be the second follow-on offer from Power Grid, which sold a 10 percent stake along with a similar stake divested by the government in November 2010 at an issue price of Rs 90 a share. The company hit the capital market with its initial public offering in October 2007.